EDAP TMS S.A. Reports 2003 Third Quarter Financial Results - UDS
Division Continues Record Breaking Year - VAULX-EN-VELIN, France,
Nov. 5 /PRNewswire-FirstCall/ -- EDAP TMS S.A. , a global leader in
the development, marketing and distribution of a portfolio of
minimally-invasive medical devices for the treatment of urological
diseases, today reported financial results for the third quarter
ended September 30, 2003. The Company's revenues for the third
quarter of 2003 were EUR 4.7 million compared to EUR 4.1 million in
the same quarter of 2002. Third quarter revenues included the sale
of ten lithotripsy machines. Total revenues for the nine months
ended September 30, 2003 were EUR 13.9 million compared to EUR 14.0
million in the same period of 2002, partially due to the decrease
in TUMT manufacturing revenues. The Company's gross margin, for the
third quarter of 2003 and for the nine months ended September 30,
2003, were 31% and 34%, respectively, versus 38% and 41% for the
same periods in 2002. The decrease, year over year, is partially
related to the strong Euro and the decrease sequentially is
primarily due to lower than expected revenues in the Company's HIFU
division. The Company's expenses in the third quarter of 2003 were
EUR 2.6 million and were EUR 8.6 million for the nine months ended
September 30, 2003, which was below budget. The Company's operating
loss was EUR 1.2 million in the third quarter of 2003 compared to
EUR 1.8 million in the third quarter of 2002 and was EUR 3.9
million in the nine months ended September 30, 2003 compared to EUR
3.4 million in the same period of 2002, partially due to the strong
Euro. As of September 30, 2003, the Company had EUR 12.0 million in
cash and cash equivalents, or EUR 1.53 per diluted share, which
reflects the Company's continued focus on cash management. Net book
value is EUR 23.7 million, or EUR 3.03 per diluted share. Philippe
Chauveau, EDAP TMS's Chairman and CEO, commented, "While the
overall third quarter results are in line with expectations, the
results by division show a different situation. HIFU division: "The
results of the Company's HIFU division did not meet expectations in
terms of either revenues or number of treatments performed. The
third quarter included several challenges, including continuing
weakness in Italy and delayed orders elsewhere. Per the conditions
placed on the HIFU division by the board of directors, the board
met on October 21, 2003 to review the milestones expected from this
business in order to give directives and determine changes so as to
retain the overall goals of the Company. "However, even with these
challenges, we continue to be optimistic about the future of HIFU
as we see increases in recognition and acceptance of HIFU in Europe
at both the patient and physician level. Additionally, there were
positive events that occurred during the quarter that have yet to
positively impact the income statement of the HIFU division. UDS
division: "The UDS division continued its record breaking year with
a very strong third quarter which included the sale of ten
lithotripsy machines, bringing the nine months number of machines
sold to 27. The backlog of machines as of September 30, 2003 was
seven units. The quarter continued to see an impact on revenues
related to the strong Euro which, through the end of the third
quarter, had a cumulative effect of EUR 1.0 million, however the
division has been able to offset this impact, as compared to 2003
expectation, with an increase in expected units sold. Finally, for
the UDS division, we continue to execute on our goal of leveraging
our distribution platform by adding new product distribution on
behalf of other companies. We anticipate announcing specifics of
these new products during the fourth quarter. "Regarding the
overall business, we had expected to be able to make an
announcement regarding a U.S. partner during this quarter. The
search has taken longer than expected. The discussions that the
Company has had have focused on the time and money required and not
issues with the effectiveness of our technologies. "In conclusion,
the Company with a September 30, 2003 cash balance of just under
EUR 12 million, continued to successfully implement its cash
management plan with a burn rate of less than EUR 1.0 million
during the quarter. Therefore, the Company expects to retain the
necessary liquidity to reach the goal of overall profitability and
positive cash flow as planned," concluded Mr. Chauveau. EDAP TMS
S.A. is the global leader in the development, production, marketing
and distribution of a portfolio of minimally invasive medical
devices primarily for the treatment of urological diseases. The
Company currently develops and markets devices for the minimally
invasive treatment of localized prostate cancer, using High
Intensity Focused Ultrasound (HIFU), through its EDAP SA
subsidiary; it is also developing this technology for the treatment
of certain other types of tumors. EDAP TMS S.A. also produces and
commercializes medical equipment for treatment of urinary tract
stones using Extra-corporeal Shockwave Lithotripsy (ESWL), via its
TMS SA subsidiary. In addition, the Company markets in Japan and
Italy devices for the non-surgical treatment of benign Prostate
Hyperplasia (BPH) using Microwave Thermotherapy (TUMT). For more
information, in the U.S., contact EDAP Technomed Inc., the
Company's U.S. subsidiary located in Atlanta, GA, by phone at (770)
446-9950. For additional information on the Company, please see the
Company's web site at: http://www.edap-tms.com/. This press release
contains, in addition to historical information, forward-looking
statements that involve risks and uncertainties. These include
statements regarding the Company's growth and expansion plans. Such
statements are based on management's current expectations and are
subject to a number of uncertainties and risks that could cause
actual results to differ materially from those described in the
forward-looking statements. Factors that may cause such a
difference include, but are not limited to, those described in the
Company's filings with the Securities and Exchange Commission.
CONTACT: Philippe Chauveau / Blandine Confort 33.4.72.15.31.50 Ian
Vawter - EDAP Technomed Inc. 1.770.446.9950 EDAP TMS S.A. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Amounts in
thousands of Euro's and U.S. Dollars, except per share data) Three
Months Ended: Three Months Ended: September September September
September 30, 30, 30, 30, 2003 2002 2003 2002 Euros Euros $US $US
Net sales of medical equipment 2,129 1,748 2,404 1,718 Net sales of
spare parts, supplies and Services 2,349 2,361 2,652 2,320 NET
SALES 4,478 4,109 5,056 4,038 Other revenues 241 30 271 29 TOTAL
REVENUES 4,719 4,139 5,327 4,067 Cost of sales (3,308) (2,565)
(3,734) (2,520) GROSS PROFIT 1,411 1,574 1,593 1,547 Research &
development expenses (792) (753) (894) (740) S, G & A expenses
(1,846) (1,880) (2,084) (1,847) Non-recurring operating expenses --
(745) -- (732) Total operating expenses (2,638) (3,378) (2,978)
(3,319) OPERATING PROFIT (LOSS) (1,227) (1,804) (1,385) (1,772)
Interest (expense) income, net 35 369 40 362 Currency exchange
gains (loss), net 60 (137) 67 (134) Other income (loss), net (3)
(27) (3) (27) INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST
(1,135) (1,599) (1,281) (1,571) Income tax (expense) credit 14 39
16 38 NET INCOME (LOSS) (1,121) (1,560) (1,265) (1,533) Earning per
share - Basic (0.14) (0.20) (0.16) (0.20) Average number of shares
used in computation of EPS 7,781,731 7,781,731 7,781,731 7,781,731
Earning per share - Diluted (0.14) (0.20) (0.16) (0.20) Average
number of shares used in computation of EPS 7,821,195 7,821,195
7,821,195 7,821,195 NOTE: Translated for convenience of the reader
to U.S. dollars at the 2003 average three months noon buying rate
of 1 Euro = 1.1289 USD, and 2002 average three months noon buying
rate of 1 Euro = 0.9827 USD. EDAP TMS S.A. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED) (Amounts in thousands of
Euro's and U.S. Dollars, except per share data) Nine Months Ended:
Nine Months Ended: September September September September 30, 30,
30, 30, 2003 2002 2003 2002 Euros Euros $US $US Net sales of
medical equipment 6,516 6,587 7,294 6,122 Net sales of spare parts,
supplies and Services 7,004 7,224 7,839 6,714 NET SALES 13,520
13,811 15,133 12,836 Other revenues 338 149 378 138 TOTAL REVENUES
13,858 13,960 15,511 12,974 Cost of sales (9,245) (8,230) (10,348)
(7,649) GROSS PROFIT 4,613 5,730 5,163 5,325 Research &
development expenses (2,344) (2,176) (2,623) (2,023) S, G & A
expenses (6,207) (6,165) (6,947) (5,730) Non-recurring operating
expenses -- (745) -- (692) Total operating expenses (8,551) (9,086)
(9,570) (8,445) OPERATING PROFIT (LOSS) (3,938) (3,356) (4,407)
(3,120) Interest (expense) income, net 42 549 47 510 Currency
exchange gains (loss), net (656) (599) (734) (557) Other income
(loss), net (164) 2,008 (184) 1,866 INCOME (LOSS) BEFORE TAXES AND
MINORITY INTEREST (4,716) (1,398) (5,278) (1,301) Income tax
(expense) credit 78 (170) 87 (158) NET INCOME (LOSS) (4,638)
(1,568) (5,191) (1,459) Earning per share - Basic (0.60) (0.20)
(0.67) (0.19) Average number of shares used in computation of EPS
7,781,731 7,768,383 7,781,731 7,768,383 Earning per share - Diluted
(0.59) (0.20) (0.66) (0.19) Average number of shares used in
computation of EPS 7,821,195 7,833,620 7,821,195 7,833,620 NOTE:
Translated for convenience of the reader to U.S. dollars at the
2003 average nine months noon buying rate of 1 Euro = 1.1193 USD,
and 2002 average nine months noon buying rate of 1 Euro = 0.9294
USD. EDAP TMS S.A. CONSOLIDATED BALANCE SHEETS HIGHLIGHTS
(UNAUDITED) (Amounts in thousands of Euro's and U.S. Dollars) Sept.
30, June 30, Sept. 30, June 30, 2003 2003 2003 2003 Euros Euros $US
$US Cash, cash equivalents 11,963 12,769 13,937 14,687 and short
term investments Total current assets 28,551 29,508 33,262 33,940
Total current liabilities 9,363 9,301 10,908 10,698 Shareholders'
Equity 23,663 24,722 27,567 28,435 NOTE: Translated for convenience
of the reader to U.S. dollars at the noon buying rate of 1 Euro =
1.165 USD, on September 30, 2003 and at the noon buying rate of 1
Euro = 1.1502 USD, on June 30, 2003. EDAP TMS S.A. CONDENSED
STATEMENTS OF OPERATIONS BY DIVISION NINE MONTHS ENDED SEPTEMBER
30, 2003 (Amounts in thousands of Euro's) EDAP TMS EDAP Consoli-
Total S.A. S.A. TMS da- After HIFU UDS HQ tion Consoli- Division
Division Impact dation Net sales of medical devices 1,148 6,499
(1,131) 6,516 Net sales of spare parts, supplies & services
1,270 6,229 (495) 7,004 Other revenues 32 304 2 338 TOTAL REVENUES
2,450 13,032 2 (1,626) 13,858 GROSS PROFIT 806 33% 3,982 31% 2
(177) 4,613 34% Research & Development (1,172) (177) (1,349)
Total SG&A plus depreciation (2,849) (3,319) (1,034) (7,202)
OPERATING PROFIT (LOSS) (3,215) 486 (1,032) (177) (3,938)
DATASOURCE: EDAP TMS S.A. CONTACT: Philippe Chauveau or Blandine
Confort, both for EDAP TMS S.A., +33-4-72-15-31-50, or Ian Vawter
of EDAP Technomed Inc., +1-770-446-9950 Web site:
http://www.edaptechnomed.com/
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